The Missing Piece: Why Sales & Biz Dev Should Lead Your Nigerian Fintech Journey

Hello and welcome to the show. Before we begin today's episode I would like to give a warning and it's tied to the episode that we did yesterday and this is the warning I want to give. I am a layman when it comes to faintings and all things tech and startup related. So take that on board when we discuss some of these ideas that I'm coming out some of these things from a sales and business development perspective. The advantage that sales as a discipline has over other sales is that to be involved in sales we have to be multifaceted and the sales functions allows you to pick up skills that are useful in other business departments and in other industries. So that is the reason why someone like me who is interested in business process can give opinions on other industries and other sectors. So I do not have a tech background or none of that stuff. So when it comes to discussing the technical particulars in this episode or if I said anything that had technical ramifications in the previous episode just take that on board. However all the things that I say regarding sales and business process and business practice are valid and with that let us move into the show now that I have that caveat is out of the way.

Let's see. Okay one more thing I'd like to give a shout out to podcast listener. His name is Odafe Omo Emevo. I hope I'm pronouncing that name properly. He connected with me on LinkedIn yesterday. He's a sales manager with GLO if I remember correctly. I accepted it and of course I asked him if he has any questions just like I will for the rest of you who reach out to me. So I love hearing from you guys. So connect WhatsApp, connect LinkedIn, any socials. I'll give my details at the end of the show. So today I'd like us to look at the typical advice that people get in Nigeria for starting your FinTech. So if you're listening to Nigerian Tech blogs, so I'm sorry to Nigerian Tech podcasts and those sorts of things. This is the typical advice that you're going to get on how to start your FinTech in Nigeria because the current series that we're on is how you can use your sales and good sales and business development frameworks,

practice and principles to inform starting up your FinTech so that your FinTech will actually succeed because one thing I failed to mention yesterday was as much as we see that lots of boys and girls are in the news these days, you know, you raise 5M, you raise 10M, you raise 20M dollars, you know, to start your FinTech. There's also the sad news that we hear once in a while,

maybe once a month or maybe every other month, this FinTech died because of this. This FinTech stalled because of that and blah blah blah blah. So this is how to make sure that you start your FinTech idea and that your chances for succeeding go up. So that is what I'm devoting this podcast episode, yesterday's podcast episode and the next ones that will follow. I can't say how many, maybe four or five on making sure that we can use good sales and business development practice to make sure that your FinTech succeeds. So the typical advice that you're going to get that is out there is that number one, you should start by identifying a financial service gap. So you look at the whole ecosystem that you want to tackle, whether it's in transfers or payments or what else, data management,

you know, all these sorts of things. Look at it, see where you think that there's a gap and then develop your value proposition. Then after that, craft a business model. So that is what most Nigerians say you should do first when you want to start your FinTech. And that makes a lot of sense because yes, you have to get very clear on what your concept is before you begin. It's not attractive to try and talk to potential employees or potential investors or stakeholders in the space.

And you're saying, we've noticed this, we can sort of do this, we can sort of do that. It'll be nice for you to absolutely be clear to say that given this framework in trying to achieve 123 and 456, we have noticed that there's a gap here. And because of that, this is the idea, this is the app, this is the technology that we propose to solve the problem. And it's going to solve this gaps in 456 and 123. And to do that, the business model that we're going to use is, we're going to use this and this and this,

our marketing channels are going to be blah, blah, blah. And you know, you get the whole picture. So it's much more attractive when you sit down in front of future business partners or investors, and you're able to clearly articulate what the idea is, what the concept is. So yes, I'll agree with the typical advice that you see out there on the blogs, on the podcasts, on the websites. Not if you want to start a fintech, identify the gap in the financial service or the framework or whatever,

develop a value proposition, craft a business model. With that, I say I agree. Then the next thing you would hear typically is, pundits would like to say the next thing you have to do is to understand the regulatory framework. Now this is what that means for those of us who don't have to play with the big boys and the big girls. I started off my business journey as a wedding photographer. When you're starting off as a wedding photographer, or as an event planner, you're typically not worried about regulatory frameworks. Well,

you should because data protection is something that applies to all businesses in Nigeria. But typically as a wedding photographer, the only people that you're worried about really, at least in Abuja anyway, is Amak. Amak is the Abuja Municipal Area Council. Those are the people who show up to your house to say you put an advertisement outside, you put a sign outside, because of that you owe us 300K, and then you guys stop quarreling.

They want to padlock your house, they want to take down the signboard, you know, blah blah blah. So that's the reason why lots of businesses in Abuja are running businesses out of residential houses without putting any signs up and all that. It's because everybody is trying to run away from Amak. Because unfortunately, well, I'm not saying that what people do is right, but when it comes to enforcement, it's basically just touts running around with clubs and who wants that kind of attention. So I'm not endorsing people breaking the law by starting business in residential frameworks. In fact, so in residential,

what's it called? Residential areas. Because those of you who've been listening to you show from the get, you know how it gets around festivities, because my neighbor runs a commercial kitchen, even though this is a residential area. So you guys know how I'm trying to record a podcast, and then you have cows moving in the background, because it's Salah or whatever, and then there are tons of cows all over the place. So anyway, what I'm just trying to say is, for most other business people,

there's a regulatory framework that they have to deal with that some of us who started out as wedding photographers, or maybe carpenters, or maybe tailors, or maybe you sell, you're starting a fish pond at your backyard. So there are lots of regulatory frameworks that other people have to deal with that we don't have to deal with. So for people in the fintech space, you're probably going to have to call up CBN,

do some inquiries. Does CBN, that's the Central Bank of Nigeria, do they regulate in any way the kind of activities that you want to do? You probably have to reach out to the SEC, that's the Securities and Exchange Commission. Do they in any way regulate what it is that you want to do? You might have to put one or two phone calls through, or go and visit somebody in the Ministry of Finance,

maybe your cousin works there, you go and ask your cousin or your sister -in -law or whatever. Ask a few questions. Ministry of Finance, do they regulate in any way the things that we're supposed to do? So if you start off with a very common sense approach to it, like okay, this is what I want to do, maybe we should look at CBN, Sec Finance. By the time you start having conversations with other people, you know, your uncle, your father, your wife, your brother -in -law,

your boyfriend, your girlfriend, by the time you start asking people what's up, you will get a sense of which other stakeholders you need to be talking to and what other regulatory frameworks that you have to comply with. So that's the second stage that people say you should do when you want to start your fainter, sorry, excuse me. Sorry, forgive me about that. The usual. My son had a, what's it called, inflamed tonsils and as usual, I'm the only person in the house who catches these things. I

don't know why. So yeah, he has passed it on to me and that's what I'm struggling with at the moment. Okay, so where are we? Yes, so for all the people who are saying, understand the regulatory framework, yeah, I agree with that and I endorse that bit of advice. So sit down, learn your co -founders, try and understand what's the regulatory framework that you're going to deal with. Flowing out from that, there's going to be some licensing that is going to be involved because when it comes to fainter, remember we're talking about financial services, you're going to be handling people's money. And I guess that's the reason why lots of people are trying to start fainter in Nigeria because when it's fainter, we don't hear small, small money, you know, as a wedding photographer, when you're collecting your pay, if you get like 400k, 500k, you know, you go and give testimony and you pay your tithes because that's good money. But these fainter boys,

everybody's talking million, billion, billion, billion, billion, million and billions. So, you know, as in big, big money. So when it comes to that kind of money, know how licensing is involved. So if CBN and SEC have regulatory purview, you're going to have to pay your fees, you're going to have to get your licenses from CBN, Central Bank of Nigeria, and from the Securities Exchange Commission. You might also have to look at NCC, that is the Nigerian Communications Commission,

you know, depending on what it is that you have to do. So for people who give that kind of advice on the blogs and on the podcasts, I agree and I endorse, you have to look into licensing. Then another thing that fainter boys and fainter girls need to look into is to choose the business structure. The reason why I bring this up is because everybody just assumes that you have to go big and do the, your,

what's it called? Oh, not PLC, what's it called? Anyway, you get the point. Everybody assumes that you need to go, go to CAC and have a formal cooperation made. But actually, there are different business models out there in the market. There are some people who run fintechs and do a sole proprietor. Okay, well, I haven't heard of sole proprietor, but I have seen theoretically that it is an option. There are some people who do partnership. Not everybody does, you know,

that big public company, limited liability company, basically. Now an example is remita. As far as I know, remita is not a public company limited by shares. Okay, well, actually, I should have checked that. Maybe remita is not a good example. But anyway, maybe you guys can go and do the research, but you you'll get what I, what I'm trying to pass across. It is not every single person in the fintech space, or who has this kind of ideas that runs a, a corporation,

a limited liability corporation, they can be different things, they can be partnerships, they can be they can have different legal structures. So check and choose accordingly. So I endorse that stage, you guys need to do your research before you set up your setup your fintech. Then people also say you should register with the CAC. I mean, that's just common sense, because you can't do business without registering.

I mean, you can, but then there's issues of liability, what else, liability asset protection, different sorts of things that are involved. If you have a lawyer, or if your younger brother or younger sister has finished law school, you know, talk to them accordingly, and they'll put you through on a couple of things. I'm not saying they should rely on those people's advice,

but I'm just saying that in the beginning, when you're doing all this small small talk, small small research, it's not bad to ask people that you have easy reach and easy access to. Then another stage that people would recommend is that you choose your technology stack. What tech stack means, I know people like saying that a lot tech tech tech tech tech tech, but basically what that just means is choose the infrastructure,

or choose the platform, choose something that you're going to build this technology on top of. So is it going to be mobile? Is it going to be payment systems? Or is it going to be a data management thing? I've already referred to these sorts of things before. So like OPA, I mentioned them in a previous episode. They're a payment processing company. So for them, that's the tech stack basically. So payments and then the things that are involved,

mobile phone, because you have to develop an app, and then it's not ATMs, all those things called POS. Yeah, the thing that you swipe your card on, POS. So you choose. So yeah, of course, I endorse that that is also something that you should be doing if you're going to start your fintech. Then of course, back to what we said earlier about regulations and all that, there's going to be plenty of security stuff that you have to comply with. And you have to research because there's the one this is why I gave the caveat earlier, in case I'm giving you guys wrong information, or if I'm telling you guys to comply with the wrong things, but the spirit of what it is that I'm trying to say is correct. So I think there's something I

think it's PCI DSS, I think that is the payment card industry data security standard, if I did my research correcting, if I got it wrong, you technical guys are back, no, but the spirit of what I'm saying is correct. There's also going to be Nigerian data regulations, you know, data protection that you have to comply with, consumer protection that you have to comply with, all these sorts of things. So I endorse this part of the process as well, because this is finance, you're going to be dealing with lots of people's money.

Sorry, one moment. Okay, I'm back. Sorry about that. I had to go and attend to the boys because they were just acting, you know, acting a fool basically. You know, this is what some of, okay, no, maybe that's too harsh, but anyway, it's just part of the deal. I mean, for those of us who have young kids, especially young exuberant boys, but anyway, I can't blame them.

You know, it's not like back in the day when we were growing up, you know, space and the family compound, you go on climb trees, you ride your bike, you know, that kind of thing. So with children being closed up. Anyway, that shouldn't be you guys problem. So where was I? Yes, I was on security and compliance regulations. Then the next step that people would recommend for setting up your fintech would be that you assemble your team and get some expertise around you. Of course, they would say get people who have fintech skills, people who have tech development skills, you know, our web developers and our people and, you know, all that jazz, then business development skills,

that's where people like me come in. And then of course, people with legal expertise, because all these compliance that we've been talking about, you know, data protection, payment protection, what else CBN, this, that, or whatnot. Yeah, that's what you need legal people for. So of course, I endorse this part of the process. Then people don't recommend that you should secure funding,

which is you talk to angels or VCs. Now, some people wonder what's the difference angel or VC, they're essentially the same thing, but with this key difference. Now the key difference is this. Currently, as at the state of business practice or things global and Nigeria, it looks like angels, mostly solo individuals, but then VCs, the way that they operate is something similar to what, like in the UK,

they would say private equity banking, more or less. So it's much more formal, more official, but the idea is the same, the angel or the VC is giving you money to start this business. They want to return on the money. Typically, they're looking for equity, and when they share in your business, you know, blah, blah, blah. So yeah, it's just that, yeah, VC more buttoned up, more formal. Angels tend to be a bit more relaxed. Maybe people doing this thing solo. So if you're one of those people who is lucky to come from a family where your uncle is a billionaire or something, so uncle Sule, that's him. He's an angel. But then if you go and meet,

let's say Tony, a loomie loo and dangote and what's the other guys name, or $3 and a bunch of them, let's say they put together something to invest in specific vehicles and blah, blah, blah. That is going to be a much more formal process than dealing with uncle Sule, you know, who is your the billionaire from your family or from your village. Then some people also say crowdfunding, but then I

wonder crowdfunding to get money for your fintech in Niger. Not quite sure, but I haven't done the research. But for those of you who are in this space, and that is the reason why I was giving caveats in the beginning, if it's something that people do and has been successfully done, and there's a legal framework that surrounds the whole thing, then when you connect with me on WhatsApp or LinkedIn, please let me know so that you know, I

can take dressing and address that accordingly on future episodes of the podcast. So what I have said so far about securing funding, assembling a team, the regulations that you have to comply with, what else registering with CAC, choosing your tech stack, choosing a business structure, licensing with CBN, SEC, NCC or any other stakeholders, getting clear on the concept. Those are steps that make a lot of sense and I

wholeheartedly endorse. But there is a problem with this script that people, this popular script that is on the podcast and that is on the blogs, and this is the downfall of the script. You will find that when most people are talking about these things, you won't see any stage that usually involves some form of a hypothesis test or some qualitative research before you incorporate and all these sorts of things. In my own opinion, I think that that is the primary reason why Nigerian fintech startups are feeling because they are not getting product market fit. They will say that the reason why they failed is lack of funding, but in my own opinion, they failed because there was lack of product market fit. Product market fit or market validation is that stage where you're trying to answer, is there demand for this idea or for this product? Do people even want this thing that we want to start? So you go, you talk to investors, it makes sense on paper, you raise a bunch of money, but then at the end of the day,

people don't really want it or the problem you're trying to solve, people don't think it's a big problem, you know, all those sorts of things. And that is the beauty of where we sales and business development people come in because the very act of running sales motions, going out and talking to people, doing all the qualitative research as they call it, you know, quantitative is all the stuff that you do.

The market size is this on paper, somebody reported this, somebody reported that, that's a quantitative, sorry, yes, a bit, yes, that's quantitative. Then the qualitative is what we salespeople do. We're going out, we're talking to people, we're having conversations, we're trying to figure out what people's needs are, if there's a problem, how bad the problem is, those sorts of things. That is the reason, that is one of the downfalls of this popular script. Business development people, people with sales aspectees are not brought in early in the process. Then you will now say that this startup failed because they were not able to secure funding to move to the next stage. The reason why investors will not give you money to move to the next stage, well,

it's complicated because there are macroeconomic factors that are involved. If it looks like the Nigerian economy is going to shite, then maybe people might want to spend their money elsewhere, invest in some other place, maybe South Africa, or they take their money back home to New York or Netherlands, or wherever they're coming from. So yeah, those things happen. But I think the primary reason would be that investors will look and say, okay,

these boys and girls, yes, they raise 2M, they raise 5M. These 5M that they use, what did they use this thing for? This 5M, does it look like there's a way forward? It doesn't look like there's a way forward. There's no point in me dropping any more money. So I think it's because there's very little emphasis on the whole thing of testing your hypothesis and doing qualitative research and going out and talking to a bunch of folks. Do you have this problem? It is a problem worth solving.

If we could solve this kind of problem, how much would you be willing to pay? We are working on so, so, so, so, so, and so when we're able to solve it, would you be willing to come on board as our first customer? These are conversations that you guys need to be having before you start this fintech. So if you guys in the fancy tech space start involving sales and business development people early in the process and start having these sorts of conversations, the chances of having a successful fintech on the back end go up because you're testing your hypothesis, you're validating the idea, you're giving good signs that if you go ahead, there'll be some form of product market fit. So that is the big downfall with all these models that you see out there. Get business development support before you incorporate,

before you raise funds, blah, blah, blah. In fact, before you raise funds because the salespeople's expertise, salespeople, well, with our expertise ties in directly with all these sorts of things, fundraising, stakeholder management, stakeholder relations, you know, all these sorts of things. So that is just the downfall with the popular script. Everything you see on the blogs and you hear on the podcast,

it makes sense, follow. But just shocking that part of involving sales and business expertise as early as possible from the beginning to make sure that you validate this business idea. This is what is going to make it easier for you to achieve product market fit in the future. And if you're one of these boys and girls who's been raising two M, five M, 10 M dollars to start your business, that is how you're going to be able to get the next batch of 10

M, 20 M, 30 M dollars, you know, for your business to grow. So I am not convinced. But then again, you know, I don't know how to read complex. Well, for me, it's in complex anyway, you know, when you look at people's, what's it called cash statements and blah, blah, blah, blah, I don't know how to read all that jazz. So maybe there's a limit of truth to this whole thing of we ran out of money.

That's why the fintech failed. But I really, really think it is my strong suspicion that is because you are not able to question a hypothesis, you're unable to validate the business idea, poor product market fit. So you have all this money, you think this is a problem. By the end of the day, it's a problem. Yeah, but it's not a problem people are willing to pay for, or there's a bigger problem that you guys did not anticipate. So thank you very much for your time and attention.

Remember to connect with me on WhatsApp or LinkedIn on WhatsApp, the phone number 080 64662140. The country code is plus 234. For LinkedIn, you can confirm the spelling of my name from the link where currently listening to this episode. So hit me up on socials, spend most of my time on LinkedIn. If you send it to me on what's it called threads or the other one, what's called Instagram, yeah, I'll get back to you, but maybe that might be next week.

So thanks for your time and attention. I'll catch you on tomorrow's episode where we're going to start delving into the challenges with selling your fintech ideas.